I don't like the "god hates fags" people any more than you do.
On the question of "terrorizing children with threats of hellfire": like you I find that sort of thing abominable. I don't advocate it.
Would I want such teaching going on in my dream-world civilization? Of course not.
Do I think the preaching of hellfire is a serious problem among the billions of religious believers in the world? No, it isn't. I assume you must think human beings are born as savage animals but do possess innate reasoning ability. That's basically what I think. Seems like a standard belief in our civilization after the Enlightenment. And because I believe that, I also believe that the majority of religious believers grow up to be rational beings who do not take the many supernatural elements of their religions literally. Some probably continue to believe it; some choose not to believe it; others grow to understand that ideas of "hell" can be read non-literally, just as, for example, the idea of "rebirth" in the New Testament is not taken literally; and, above, all, if they remain believers, they will likely focus on all the positive, life-affirming aspects of their religion.
I mean, you do realize, don't you, that the vast majority of believers are aware of the contradictions in the Bible and know that it was written by flawed men, right? This is not a secret which atheists have discovered. Any true religious believer would laugh at the idea that the Bible is the genuine word of God, to be read literally, just as they would be horrified if Christ's DNA were discovered in a buried scrap of cloth in Jerusalem. It is true among all the major religions that anyone who believes must also struggle, perhaps for a lifetime, with the interpretation of scripture and the proper way to live her life.
(I say "all major religions", but the form of Christianity which has become prominent in the United States is...a problem.)
But I think your question is also asking if I find people who take their kids to church to listen to sermons which talk about hell are "reasonable". Another way to respond to this is to go back to my earlier point: who among us is reasonable? Who among us is free of illusion?
You wouldn't teach your daughter about hell. Tell me, what would you say when she asks you what love is?
Talking about hell, devils, and even Jesus and his "crew" is interesting, already from a broadly cultural-historic-artistic point of view (I can't do without when I marvel at Caravaggio's work, or Michelangelo's Last Judgement).
It's another matter entirely to teach children that they have to sleep on their right side because otherwise the devil will enter through their ear, or that they have to lie down on their right side, or else they'll go to hell if they die in their sleep...